In past years, the visual arts have always appeared to take a back seat during the Edinburgh international festival. Perhaps it seemed impossible to compete with the cacophony of the main festival, the fringe and the book festival. Sorcha Carey, director of the art festival, has decided to redress the balance with Festival Promenade, a series of works intended to bring the visual arts out of the galleries and into the places where people will be gathering for events. This "magical playground" will feature commissions allowing the artist "to create works that interrogate their spaces". To quote one participating artist, "art is the thing that allows us to ask interesting questions about your life".

The festival's first permanent "legacy" installation was Martin Creed's Work No 1059, commissioned for it by the Fruitmarket Gallery. The work, 104 outdoor steps clad in differently coloured marbles, accompanied Creed's retrospective show at the gallery. This year, with a commissioning budget of £250,000, Carey has turned away from permanent installations and chosen instead to commission a daring set of new interactive works, declaring that the choice is "unabashedly about showcasing Scottish artists". While the ambitious list includes some well-known artists, including Susan Philipsz, the 2010 Turner prize winner, and Callum Innes, a 1995 Turner prize nominee, it also embraces recent graduates of Scotland's art schools.

Carey says her chief aim is "to establish the delicate but important balance between the permanent and temporary in this massive World Heritage Site". I first met her during the opening week of dOCUMENTA (13) in Kassel, where she introduced me to Philipsz, whose Study for Strings, a sound piece responding to the history of the Hauptbahnhof, was one of the most affecting works for many visitors.

Timeline, by Susan Philipsz

Philipsz confessed that when she made her first site visit to Edinburgh she did not really know the city. As a child growing up in a large Catholic family in Glasgow, she spent little time in Edinburgh, later studying in Belfast and New York and eventually settling in Berlin. She says her inspiration for Timeline, her Edinburgh work, was the spectacular view spread out below Nelson's Monument, and the tradition of the daily one o'clock gun in Edinburgh Castle, which was originally connected by a mile-long cable to the ball-drop on Cable Hill for sailors at sea to set their chronometers.

Philipsz's work will replace the long-removed cable, her sung tripartite chord being taken down the hill through seven individual speakers in a kind of domino effect. The work is a homage to Edinburgh resident John Robinson, who invented the siren, and to the sirens from Homer's Odyssey who lured sailors on to the rocks with the devastating beauty of their sound. Philipsz plays me the chord, simple and pure, which sounds to her, she says, "somewhat like a train". Its magic in Edinburgh will be its fleetingness, under a minute in all, and the mystery of where the sound is coming from.

Philipsz's sound trajectory will finish near the gun itself, in the gardens beneath the castle, where Edinburgh College of Art graduate Emily Speed will stage a one-off performance of Human Castle. The work will be composed of 10 "acro-balancers" in cardboard costumes, counterbalancing to form a castle-like shape before dismounting. Carey observes that Speed "draws out fragility in something that we often think of as solid and immovable by making them animate".

This is Speed's first performance back in Edinburgh, having left the city in 2002 to live and work in Japan before settling in Liverpool, and will be the first time she has not taken part. Instead she will assume the role of director: "It's quite strange to lose control of the work," she says. "It's terrifying but exciting working with the acrobats and I know that people will ask if it is acrobatics or a piece of art."

She describes the commission as "an act of faith", saying Carey "is not scared to take risks." When I speak to Speed she is in the midst of making the costumes. "I won't know if it works until they do it," she says. "I am asking the acrobats to do something they have never done before: counterbalance." There will be only one performance lasting a few minutes, but it will be filmed and screened throughout the festival.

In her determination to integrate the programme into the city, Carey identified Rose Street, a short road dominated at one junction by a brutish modernist BHS, as an ideal location for works. The Rose Street film programme will include Speed's film and will show on small screens in shop windows along the street in daylight, while at night films will be screened on BHS's large external wall.

Rose Street will also be the location for Kevin Harman's work 24/7. Carey first saw the work of Edinburgh native Harman in his degree show. She says his work is "engaging people about the world and the art, 24/7," and her ambitions for the festival as a whole seem to be summed up in the way she describes his piece as a "facilitation of dialogue".

Harman stole 210 of his neighbours' doormats from three enormous tenement buildings, leaving notes that they could be reclaimed at his degree show, where they were arranged as a giant work of art. The work sought to bring the community together in an unexpected way. Harman says he "comes to an environment open to the ideas of the viewer". He chooses not to talk about details of his festival project, saying: "If I think too much about the project it becomes too contrived."

Anthony Schrag's Wall Standing. Photograph: courtesy of Ben Premeaux

The contribution of artist Anthony Schrag – a pub crawl tour – is bound to be popular. It too will take place on Rose Street and is part of Carey's aim to "encourage people to broaden their idea of what art can be". Although Schrag is currently based in the city, he is billed as the Edinburgh "Tourist in Residence", reflecting his interest in the changing landscape of his beloved city. He will take small groups around Edinburgh on unusual outings ranging from an early morning walk to a blindfold tour and a communal nap in a park, as well as the Rose Street pub crawl. Although the majority of Schrag's work has been produced outside the gallery context, he does not see himself as a performance artist. He observes that "unlike in performance art, the viewer takes equal part in the creation of the work". Rather than the city's beauty spots, his tours will explore the dark alleyways, turning away from the idea that "art looks at beautiful things".

Of all the artists participating in Festival Promenade, Callum Innes, an Edinburgh resident who shows with a local gallery, could be called the most traditional, with his paintings unashamedly exploring pure abstraction. But for the first time, he works here in light: in his installationThe Regent Bridge, two "paintings" made of light will change colour with random variations. He says he wanted to "bring attention and to re-emphasise" the structure and beauty of the Regent Bridge. "This is such a dark part of Edinburgh, behind the station, that the changes have to be quick. It's a work of art, not a Georgian project," he says firmly. Like many others, Innes felt that the "festival has always deserved a good visual arts festival", so he donated his fee and says nervously, as he has not seen the finished work yet, "it challenged me and works for the city".

Song Bird by John Bellany, 1992.

The Glasgow-based artist Andrew Miller provides the seeming centre of the installations with The Waiting Place, a temporary structure that will provide shelter from the elements, a starting point for Schrag's tours, and information including artist Peter Arkle's fantastical yet useful map of the festival. Miller has been exploring the interplay between design and art for years. I tell him that his piece seems the most imposing, in a sense, and he laughs. "It's hard to find – you have to go off the path and go into the trees, and after the festival it will disappear unless someone comes and decides to buy it and they have both space and a tree to put it round." I point out how different this seems from the more grandiose Serpentine Pavilions. Miller admits that he had a "quite generous budget, but the structure, while it is temporary, is robust. This is a cross between an Alvar Aalto summerhouse and a Trinidadian shack." The Waiting Place appears to be more of a whimsical summerhouse, and is appropriately named after a line from Dr Seuss: it offers a space "in which you're welcome to simply enjoy the act of waiting for something to happen". Miller says "it will keep you dry, but it is well ventilated deliberately, as it is about looking out. People animate it."

In Edinburgh, Carey is channelling artists' energy to act outside the cossetted space of the white cube. But if interactive work is not your thing, there are promising shows of Dieter Roth, Philip Guston, John Bellany and the blockbusterPicasso and Modern British Art, recently at Tate Britain, in Edinburgh museums. For me, though, I imagine Susan Philipsz's haunting sounds will hang in the air long after the festival, encouraging tourists to retrace the mile-long journey of her lost chord. After all, the definition of "promenade" is to walk with pleasure.